Law 15/V/96 of November 11, 1996, published in the official gazette, supplemented by Law 93/V/99 of March 22, 1999, is the law providing the generalframework for Cape Verde’s National Statistics System (SEN), approved by the National Assembly and promulgated by the President of the Republic. The SEN includes the National Statistics Council (CNEST – the highest government agency directing and coordinating the SEN, governed by its own statute approved by the Council of Ministers at its suggestion), the National Statistics Institute (INE), and the Agencies Producing Sectoral Statistics (OPES), namely:

a)Bank of Cape Verde;

b)Central Research and Planning Office of the Ministry of Agriculture;

c)Central Research and Planning Office of the Ministry of Education;

d)Central Research and Planning Office of the Ministry of Health;

e)Central Research and Planning Office of the Ministry of Justice;

f)Central Research and Planning Office of the Ministry of Fisheries;

g)Institute of Employment and Professional Training.

The agencies producing sectoral statistics are responsible for collecting, processing, and analyzing statistical information on the respective sectors.

Articles 4, 5, 6, and 7 of the law providing the bases for the national statistics system deal, respectively, with the principles of exclusivity, technical autonomy, statistical authority, and statistical secrecy in carrying out statistical activity in the country.

Accordingly, pursuant to this legislation only the INE and the OPES can produce official statistics in Cape Verde.

- Total freedom to seek the most appropriate technical means of fulfilling their functions;

- Statistical authority to obtain from individuals and groups located in the national territory all information (with the exception of information relating to political orreligious beliefs, as well as information relating to bank secrecy) needed to produce official statistics. In this connection, legal instruments were created to regulate statistical noncompliance – Decree-Law 42/99 of June 21, 1999 to strengthen the requirement of providing information for statistical purposes, to which all are subject.

The INE, in providing technical coordination for the statistical activity carried out in Cape Verde, has concluded cooperation agreements with certain institutions, namely, the Bank of Cape Verde, the Research and Planning Office of the Ministry of Education and Optimization of Human Resources, and the Institute of Employment and Professional Training, with a view to promoting information exchanges, the integration and harmonization of methodologies, and the implementation of joint projects, such as the Official Statistics Database, the aim of which is to rationalize the use of resources and improve the accessibility of official statistics. To improve the quality and relevance of the official statistics and ensure their proper use, the INE is developing a cooperation network with upstream statistical institutions and providers of raw data. Accordingly, it concluded cooperation agreements with the Chamber of Commerce, Industry, and Services of Sotavento, and with the National Social Security Institute.

Moreover, SEN agencies and their staff are required to observe statistical secrecy with a view to protecting the privacy of others, with a commitment not to disclose individual information, regardless of the circumstances.

In the specific case of the INE, the principles of statistical authority, scientific autonomy, prerogatives and powers and also the principle of confidentiality are clearly expressed in Articles 2, 3, 6, 7 and 30, respectively, of the INE'sstatutes, as approved by Regulatory Decree 9/2000 of September 4, 2000, published in official gazette No. 27. Regarding the physical security of data, the INE has invested heavily in computer equipment to protect individual data and store time series.

Accordingly, pursuant to this legislation only the INE and the OPES can produce official statistics in Cape Verde.While INEhas theresponsibility for technical coordination, theagencies producing sectoral statisticsare granted:

- Total freedom to seek the most appropriate technical means of fulfilling their functions;

- Statistical authority to obtain from individuals and groups located in the national territory all information (with the exception of information relating to political orreligious beliefs, as well as information relating to bank secrecy) needed to produce official statistics. In this connection, legal instruments were created to regulate statistical noncompliance – Decree-Law 42/99 of June 21, 1999 to strengthen the requirement of providing information for statistical purposes, to which all are subject.

The methodological reference for Cape Verde’s National Accounts is the United Nations System of National Accounts (SNA) 1968. GDP is calculated on an annual basis as the sum of the value added of economic activity (production approach) divided into 48 industries, and also by component of final expenditurein the country (expenditure approach).

The production accounts are calculated by industry at current and constant prices, with 1980 as the base year. Gross value added at constant prices is determined, using the double deflation method, as the difference between output and intermediate consumption, both at constant prices.

The national accounts cover all economic units resident in the country. All transactions in goods and services are covered, except those that are illegal.The accounts are produced taking into account all economic agents resident in the national territory, including enterprises operating in free trade areas. There are no off-shore economic activities.

The base year is 1980 and the data are presented in contos (1conto = Cape Verde escudos (CVE) 1,000).

The most recent final national accounts are for 1997 and can be found in the recently released national accounts publication, “National Accounts, 1987–1997 Series”.

This following tables are included in this publication:

Composition of GDP in the 3 approaches (table reconciling the production approach with the expenditure and income approaches)

Summary table of the resources and uses balance at current and constant prices

Gross output (48 and 22 industries) at current and constant prices

GDP at market prices and at factor cost at current and constant prices disaggregated for 48 and 22 industries

Exports of goods (f.o.b.) and services at current and constant prices

Imports of goods (c.i.f.) and services at current and constant prices

Household consumption (by categories of goods and services) at current and constant prices

Investment (GFCF), by type (construction, other works, transport equipment and other machinery and equipment) at current and constant prices.

The industrial classification used to calculate the national accounts is the CAE-Revision-1 of 1973, which is equivalent to the United Nations ISIC, Revision 2. In the current system of national accounts, the same classification is used for sectors and products.

Prior to implementation of the customs classification of the Harmonized System in 1996, foreign trade used the ECOWAS (Economic Community of West African States) tariff schedule. Based on this schedule, the CGCE-CV (Classification by Major Economic Category in Cape Verde) was developed to provide output for the national accounts. With the implementation of the Harmonized System (SH), using Eurotrace, and considering the difficulty of obtaining outputs suitable for automatic use in the national accounts in the current form of the calculation system, Harmonized System correspondence tables were created for the CGCE-CV.

The national accounts are based essentially on the production account estimates and on foreign trade statistics, primarily imports. The distribution of production and the value of imports by economic use constitute the methodology used to obtain the final expenditure components, especially household consumption, in order to calculate GDP in the expenditure approach. Thus,the National Accounts of Cape Verde are compiled in the production and expenditure approaches, but not independently, i.e., there is no real process of integration and synthesis. The approach taken for the national accounts is strongly oriented toward determining production by industry.

The primary sources of information used in the National Accounts estimates are:

INE'sAnnual Enterprise Survey, which provides information about the economic activities of the commercial, industrial and services sectors;

The Ministry of Agriculture (agricultural statistics bulletin) for the agriculture and livestock sectors;

The National Institute for Fisheries Development (INDP) (fisheries bulleting) for the fisheries sector;

The General Government – central and local governments, and the social security system, specifically the General Government Account and the management accounts of the Municipal Councils and Autonomous Services and Funds, the annual report and accounts of the National Social Security Institute (INPS) required for the estimates of the “government services” (general government) sector;

The Directorate General of Planning, which provides information on the Public Investment Program (PIP), required to calculate the investment (GFCF) and the “construction” sector in particular, as well as to calculate the output of the “government services” sector.

The foreign trade, which provides information for almost all activities included in the national accounts.

1. Production approach

Many sources are used to prepare the accounts of the various industries: one of these is the Annual Enterprise Survey (IAE) of the INE. In 1998 and 1999 an enterprise census was conducted coveringthe year1997. This census was based on Cape Verde’s new CAE. The first phase carried out in 1998 was comprehensive and aimed at identifying all visible economic units operating in the national territory, which made possible the creation of the Statistical UnitsRegister (FUE). In the second phase, carried out in 1999 (again pertaining to fiscal 1997), a sample was constructed based on the previously identified universe. The sample includeda questionnaire that was fairly demanding, in terms of both financial data and data on volumes (of production and sales, of raw materials); the latter was developed with a view to identifying the structure of productive activity in the various sectors, in order, in some cases, to be able to update the technical coefficients.

Since then, the IAE has become routine for the INE. For each year, a copy of the FUE for that year is made and used to construct the sample for the survey. Various criteria are used in the sampling process, including whether or not the enterprise has an organized accounting system, the number of employees, and the legal form of the economic units. The survey includes all enterprises with organized accounting and/or 21 or more employees, and a sampling of units with fewer than 21 employees.

Two types of notation instruments are used in the IAE, one for large enterprises and another for small enterprises. The survey of large enterprises consists of two parts, one employing the standard questionnaire, made up essentially of the financial tables and questions concerning employees, and the other a special questionnaire for physical data on the unit’s activity. Generally, to minimize response time, enterprises are asked to submit a copy of their annual report and accounts instead of completing the financial tables.

The FUE is updated with data from the IAE as well as other sources, particularly:

Announcements in official bulletins containing information on newly established companies;

Permits granted by municipal councils to engage in a given economic activity.

The FUE basically covers the activities of the industrial, commercial, and services sectors. General government and the economic units of agriculture and fisheries are not included in the FUE database.

Data sources for industries whose units are not included in the FUE

Agriculture: All the operating units in this sector are run by households. The data on volume output come from the Ministry of Agriculture publication, Estatísticas Agrícolas (Agricultural Statistics). Only crops that do not require irrigation (corn and beans) are regularly monitored. An annual survey is conducted for these crops, to collect crop year data. Because irrigated crops are handled differently, only flash estimates are available for horticultural products.

It should also be noted that the last agricultural census dates back to 1988, and there is no fruit tree registry.

Livestock: The data source is the Ministry of Agriculture which, in the agricultural statistics bulletin, publishes data on the livestock population. It should be noted, however, that basic statistical data on this sector are quite scarce. The last livestock census was conducted in 1995, and there are no data on the zootechnical criteria used to estimate the growth of the livestock population.

Fisheries: The data on the catches of both industrial and artisanal fishing units come from the fisheries statistics bulletin of the National Institute for Fisheries Development (INDP).

The operating units (fishing vessels) are for the most part run by households, particularly in the case of artisanal fishing.

Because of the country’s insular nature and the existence of a large number of unloading points (93 in 1995) for artisanal fishing craft, the INDP developed its own methodology for estimating the catches of this type of activity. A sample consisting of 15 unloading points was constructed in which the vessels selected are surveyed over the course of six working days per month, selected at random.

Owing to the small number of vessels involved in industrial fishing, all units are surveyed, including seafood preservation enterprises that also engage in fishing activities.

General Government includes the central government (the State and the Autonomous Services and Funds), local governments (municipalities), and the social security system.

The data sources are the Government General Account and the Public Investment Program (PIP), the management accounts of the Autonomous Services and Funds and the Municipal Councils, as well as annual report and accounts of the National Social Security Institute.

The government services (general government) accounts are prepared on the basis of transition tables (cuadros de passagem) between the classification of revenue and expenditure and the national accounts classification.

The Public Investment Program (PIP), because of its importance to the economy as a whole, is considered a primary source of statistical information for preparation of the national accounts. The PIP provides information for calculating wages and intermediate consumption in the public services sector and is essential for calculating investment as a whole (gross fixed capital formation plus changes in stocks) and for the construction sector, in particular. It also provides information for the correction of possible errors in the coverage of foreign trade, regarding imports of transport equipment and other machinery and equipment (see compilation practices).

The Directorate General of Planning coordinates and compiles data on the physical implementation of investment projects managed by the research and planning offices of the ministries and prepares an annual report on the implementation of the PIP.

Foreign Trade is one of the main sources of information for the national accounts. Customs information is processed in the Foreign Trade Division of the INE, which provides data for the national accounts on the imports of economic agents, broken down by product and by major economic category (consumer goods, intermediate goods, capital goods, and fuels, all recorded separately), as well as by importer.

Central bank statistics are another source of information for the national accounts, although the central bank is of interest in the current model of the accounts only as an economic unit that is part of the banking services sector.

2. Expenditure approach

Merchandise imports come from Foreign Trade (processed) and from the balance of fuels. Imports of services come from the accounts of user sectors.

Exports come from the sectoral accounts (use of production).

Household consumption is the sum of imports of consumer goods, a portion of fuels, some imported services (travel), and local consumer goods (according to the distribution of each sector’s production).

Government final consumption comes from the “government services” account (general government).

Gross fixed capital formation (GFCF) is obtained from the distribution of national production and the processing of the investment program (equipment component), plus investment in transport equipment outside the investment program.

Changes in stocks are derived, as in the case of household consumption, from the distribution of national production and the processing of Foreign Trade.

The national accounts pillar is based on production account estimates and on foreign trade statistics, primarily imports. The distribution of production and the value of imports by economic use constitute the methodology used to obtain the final expenditure components, especially household consumption.

The double deflation method for Gross Value Added (GVA) is summarized as follows:

-The deflator used for the gross value of production is a Paasche-type index, calculated with detailed information on the prices and quantities of goods produced by the enterprises, obtained by means of a questionnaire.

-The deflator for intermediate consumption is an index of the same type for the primary inputs (the producer or import price is used, depending on the origin of the goods) and a general index for the other unspecified products.

Summary description of main compilation practices

Agriculture: Agricultural production is valued using the prices paid by final consumers as well as assumptions concerning trade margins. The uses of production are estimated on the basis of assumptions, primarily concerning the own consumption component of production. The intermediate consumption of the sector is calculated either using endogenous assumptions (for example, local seeds) or on the basis of foreign trade data (imports of seeds, chemical fertilizers, pesticides, etc.).

Livestock: Animal production for meat and for capital formation is estimated by type of animal, based on the livestock population reported in the agricultural statistics bulletin, and production is valued by estimating producer prices based on the prices paid by final consumers and assumptions concerning trade margins.

Fisheries: In the national accounts, production is valued by estimating producer prices based on consumer prices and assumptions concerning margins. The intermediate consumption of fisheries, except fuels, is derived from foreign trade, with a distribution assumption of 40 percent for artisanal fishing and 60percent for industrial fishing.

For industries and services, the concern in terms of compilation is determining production at producer prices; consequently, the responses in the specific questionnaires are very important. The difference between the value of sales and the value of production at producer prices yields the margin used to calculate the production of the trade sector.

The Enterprise Census (1st phase) was the source of the universe of economic units providing personal services and business services. In the second phase, a representative sample was constructed by selection. Using extrapolated data, it was possible to improve the methodology for calculating the production of these sectors. To the value of production of each of these sectors, provided by the extrapolated results of the survey, was applied a structure obtained from the accounting data of several enterprises in these sectors that already had an organized accounting system.

This approach was used in the 1993-1996 national accounts. Because the final accounts for those years were still being prepared when the results of the census became available for the national accounts, the results (for 1997) were retrapolated for 1996, 1995, 1994, and 1993.

Public Investment Program (PIP)

The National Accounts Division is responsible for the computer processing of the PIP implementation report prepared by the Directorate General of Planning, with due attention to the type of expenditure (investment and operating) and the entity implementing the project. Investment expenditure includes wages, construction materials, technical assistance, other goods and services, gross operating surplus, and equipment. Operating expenditure is broken down into wages, technical assistance, and miscellaneous goods and services. The entities implementing the projects may be the central government or local governments, other government or parastatal agencies, or enterprises (private or mixed).

Consequently, the operating expenditure of projects in the general government sector will be taken into account in calculating the production account of the respective sector.

The information provided by the PIP concerning the disaggregation of investment expenditure makes it possible to isolate the inputs used and to allocate the remainder to the estimate for private sector investment projects.

Foreign trade: In the national accounts, some adjustments are made, specifically with regard to fuel imports (in which the information from oil companies operating in the country is given preference) and certain food products (part of which is food aid). Some reclassifications are also made concerning the use of imported products classified only as consumer goods or only as intermediate goods. Foreign trade data are used to calculate trade margins, which are used preferentially to calculate the production of that sector. Foreign trade is used to indirectly estimate the informal trade in imported goods for the national accounts.

Total imported inputs used by the construction sector are obtained by comparing the data on imports of construction materials with the inventories of businesses that sell such products.

Construction

To calculate the production of the construction sector, available materials and other construction inputs, both local and imported, are first valued at current and constant prices. These inputs are distributed in accordance with the compilation practice of the above-mentioned investment program. It is believed that the remaining input is used by private construction.

The production account of the construction-related sectors is estimated on the basis of available materials and technical coefficients (in the case of carpentry), enterprise data (for the materials manufacturing sector), or construction sector needs (in the case of the materials extraction sector).

Reconciliation

The production and expenditure approaches are used to compile Cape Verde’s national accounts, but not independently; in other words, there is no real process of integration and synthesis. The approach taken for the national accounts is strongly oriented toward determining production by industry, with no coverage of the processes of income distribution and redistribution.

All INE publications include a methodological note. Moreover, on its website (www.ine.cv), the INE provides information on: informative seminars and discussions for the public, statistical operations in progress, emphasizing their nature, objectives and phases of work. In this way, the public is informed of improvements/changes that such operations may introduce in the methodology for calculating some indicators. In addition, the Official Statistics Database project includes a metadata component, which includes the methodology for calculating each indicator.

Estimates for national accounts main aggregates and tables for 1998-2000 are compiled and disseminated on the INE website.

All transactions in goods and services are covered, except those that are illegal.The accounts are produced taking into account all economic agents resident in the national territory, including enterprises operating in free trade areas. There are no off-shore economic activities. Main national account and aggregates are compiled and disseminated as recommended.

The most recent final national accounts are for 1997 and can be found in the recently released national accounts publication, “National Accounts, 1987–1997 Series”.

The following tables are included in this publication:

Composition of GDP in the 3 approaches (table reconciling the production approach with the expenditure and income approaches)

Summary table of the resources and uses balance at current and constant prices

Gross output (48 and 22 industries) at current and constant prices

GDP at market prices and at factor cost at current and constant prices disaggregated for 48 and 22 industries

Exports of goods (f.o.b.) and services at current and constant prices

Imports of goods (c.i.f.) and services at current and constant prices

Household consumption (by categories of goods and services) at current and constant prices

Investment (GFCF), by type (construction, other works, transport equipment and other machinery and equipment) at current and constant prices.

The release calendar is prepared annually and approved by the National Statistics Council (CNEST) when presenting the statistical activity plans of the INE and the other agencies producing sectoral statistics (OPES) and is disseminated in official bulletins of Cape Verde. Moreover, the INE usually publishes newspaper articles on the most important projects, with an indication of when the results will be available.

When new data become available, this is announced in a press release distributed to all media, both public and private. Summary tables are also posted on the INE website. In many cases, these tables are alsosent to a large number of users via e-mail.

The INE currently has a policy governing the distribution of its products and services, as well as a pricing policy. Many institutions (public especially, as well as the media) receive publications free of charge or on a swap basis.

The INE also provides personal services to users of statistical information, including entrepreneurs, students at various levels of education, researchers, users residing abroad, etc.

Creation of an internet site (www.ine.cv), where users can access the summary of all statistical information produced. The site is also used to publicize INE products and also to inform the public of major statistical operations.

The 2000 Census is also available on CD-ROM (no longer in hard copy only)

Use of the General Population and Housing Census database to prepare topical publications.

National accounts

Completion of preparatory work in the context of the Reform of the National Accounts, with a view to implementingthe SNA93, included in the project “Public Sector Reform and Training,” financed by the World Bank and with technical assistance from Portugal for the INE.

Preparation of the main classifications for the accounts – Classification of industries based on the CAE-CV (ISIC rev. 3), classification of products based on the CNBS-CV (CPC 1.0), Classification of Individual Consumption by Purpose (COICOP), Classification of the Functions of Government (COFOG), Harmonized System for Foreign Trade Statistics.

Development of the methodology for compiling the accounts of the sectors of general government, financial corporations, and rest of the world accounts.

Development of the methodology for compiling some industries and specific operations (household consumption andtrade margins).

Develop an Official Statistics Database (BDEO)for the entire National Statistics System (SEN). The database willutilize the SQL Server and should: centralize all official statistical production in Cape Verde; enable data queries based on user needs; improve Internet access to data; link statistical information (data) to metadata.

Construct data storage and reproduction of publications on CD, using digital technologies.

National accounts

Approve all classifications for the future System of National Accounts of Cape Verde and prepare correspondence tables.

Compile the new base year and reference year for the national accounts.

Catalogue the data sources for the new system of national accounts.

Prepare surveys to be carried out to meet the data needs identified, including the expansion of the scope of the Annual Enterprise Survey (IAE).

Technical assistance to implement SNA93 using the national accounts compilation software (ERE-TES).

Financing and technical assistance needed to develop calculation models for the quarterly accounts.

Financing and technical assistance needed to develop calculation models for the regional accounts.

Other Prior Requirements

Reinforcement and training of human resources responsible for compiling the national accounts.

Agricultural census

Implementation of a system for the regular monitoring of both irrigated and non-irrigated crops.

Updating of the fruit tree registry.

In the livestock sector, conduct the cattle survey based on zootechnical criteria, particularly fertility, mortality, and number slaughtered, both in slaughterhouses and on farms, to enable calculation of the sector’s production.

Implementation of a permanent system for monitoring the producer prices of agricultural, livestock, and forestry products.

Implementation of the household employment survey.

Introduction of the VAT by the Directorate General of Contributions and Taxes.

Implementation of the Government Administrative and Financial Reform (RAFE) Project.

Notes:

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